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Rail no: For return on investment, look to interstates

LAS VEGAS REVIEW-JOURNAL

A lot of locals were never high on the proposed XpressWest high-speed rail project because the train initially would travel no farther than Victorville, Calif. The refrain from letters to the editor and talk radio shows: “Who in Las Vegas wants to take a train to Victorville, then have to rent a car to get to Los Angeles or San Diego?”

But the train wasn’t planned for Southern Nevadans who travel to Southern California. The project hoped to get Californians to park their cars in Victorville, then take a relaxing ride to the Strip at speeds of up to 150 mph. Eventually, the route would connect to Palmdale — a short drive from Los Angeles — and California’s planned network of high-speed trains.

There always was a far more compelling reason for Nevadans and taxpayers everywhere to oppose the train project: debt. And last month, that very reason put the project in peril.

On Wednesday, Review-Journal Washington bureau reporter Steve Tetreault noted that then-Transportation Secretary Ray LaHood, in a letter sent to XpressWest on June 28, determined that due to threshold issues and “significant uncertainties still surrounding this project, we have decided to suspend further consideration.”

Like most recent rail projects, XpressWest ridership projections were overly optimistic. The train certainly appeared capable of meeting its operational costs, but the idea that it could make good on repaying $5.5 billion in debt on top of that was a stretch. Las Vegas Monorail, anyone?

Any high-speed rail project in America that applies for these funds faces the same challenges, because operators have no chance of raising that kind of money privately. Debt payments have wiped out an untold number of companies over the past five years. Capital is scarce.

LaHood’s letter also noted that XpressWest’s application was shelved in part for failing to meet “Buy America” rules — although generally, there are no American builders of bullet trains.

Make no mistake, the Las Vegas Valley needs all the investment it can get. But there needs to be return on that investment. The prospect of default on a train loan is too much to ask from a federal government already $17 trillion in debt.

Here’s a better idea for new Transportation Secretary Anthony Foxx: Dump the idea of pouring huge sums of money into a utopian high-speed rail project that can’t possibly cover debt payments. If the department is serious about “investing” those billions, spend them on improvements to the nation’s interstate system, which carries both passenger and commercial traffic and is in constant use, 24-7. Interstate 15, which runs between Los Angeles and Las Vegas and is heavily congested, could use the money. So could the planned Interstate 11 between Las Vegas and Phoenix.

Improved interstates would speed commerce, create permanent jobs and have billions upon billions of dollars in long-term economic impact across many states. That would be a return on investment. A tourist train on a high-speed trip to bankruptcy? No so much.

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